Financial Accounting Conceptual Framework For A Comparative Study

Nowadays, Conceptual Framework for Financial Accounting (CF) has been the coreof financial accounting theory. Many western developed countries (such as USA, UK,Canada and Australia and so on) and International Accounting Standard Committee (IASC)all paid much attention on the study of CF, and had set up their own CF one after another.When establishing CF in China, the "two-step" way has been taken. The first step is torevise The Basic Standard of 1992 and regard the revision as the present CF of China. Thesecond step is to transform The Basic Standard to a real CF which form will much moreconsist with its theoretical substance, when conditions maturate. With the issuing of newBasic Standard with many amendments on 15th February, 2006, the present CF withinternationalism and Chinese features has been established in China. However, new BasicStandard still has a few shortcomings which should be revised and improved. Besides,some other efforts should be made in order to carry out the second step transformation andestablish a real CF with proper form at an early date.Based the background above, the subject of this paper was selected. The paper firstlyexplains the definition and functions of CF, and then reviews development of CF in someforeign countries. Secondly, following a brief introduction of background and plan ofsetting up CF in China, the paper analyzes changes between former Basic Standard and therevised one to help readers know the main content of the present CF well. Thirdly, newBasic Standard is compared with other foreign typical CFs comprehensively in terms of theform and the content concluding the objective of financial statements, the qualitycharacteristics of accounting information, the definition, recognition and measurement ofaccounting elements, and the presentation of accounting information. According to thecomparison, the paper gives the conclusion that the present CF of China has harmonizedwith foreign influential CFs on the whole, and summarizes four Chinese features of ourpresent CF. Besides, the paper points three aspects of new Basic Standard which should berevised and improved, and gives relevant suggestions. Finally, four proposals are putforward in order to carry out the second step transformation and establish a real CF withproper form at an early date.Because it has not been a long time since the issue of new Basic Standard and theestablishment of the present CF of China, the study on this aspect is not verycomprehensive and deep. Therefore, the study of this paper has significant meaning notonly theoretically, but also practically.